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SAFERSTEIN v. PAUL

June 10, 1996

NORMAN I. SAFERSTEIN, ARNOLD KANAREK, SEBASTIAN SCHIAVONE, LEONARD WEISS and IRA E. SAFERSTEIN, Plaintiffs, against PAUL, MARDINLY, DURHAM, JAMES, FLANDREAU & RODGER, P.C. and BRUCE RODGER, individually, Defendants.


The opinion of the court was delivered by: CONNER

 Conner, Sr. D.J.:

 This diversity case, in which plaintiffs, pro se, assert claims for breach of contract, extortion, malpractice, misrepresentation, fraud/conspiracy, unethical conduct, and breach of fiduciary duty, is before this court on defendants' motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(2), 12(b)(3), and 12(b)(6). Jurisdiction over defendants in this matter is based upon New York's long-arm statute, section 302 of the New York Civil Practice Law and Rules ("CPLR"). Plaintiffs have placed venue of this action in the Southern District of New York pursuant to 28 U.S.C. § 1391(a). Defendants have moved to dismiss the amended complaint on grounds that this court lacks jurisdiction over them, that venue is improper, and that the amended complaint fails to state a cause of action upon which relief can be granted. For the reasons discussed below, we order that this case be transferred to the Eastern District of Pennsylvania pursuant to 28 U.S.C. §§ 1404(a) and 1406(a).

 BACKGROUND

 Plaintiffs in this action were once clients of defendant Bruce Rodger ("Rodger") and his law firm, defendant Paul, Mardinly, Durham, James, Flandreau & Rodger, P.C. (the "Law Firm"), in a security frauds action (the "Underlying Action"). The Underlying Action was brought in the Eastern District of Pennsylvania, and venue subsequently was changed to the District of Delaware, where it was tried in U.S. District Court for the District of Delaware. After a jury trial in July 1993, a verdict was returned in favor of the solvent defendants in that action.

 The instant action arises out of defendants' representation of plaintiffs in the Underlying Action. *fn1" Non-party Paul Bucco ("Bucco"), an attorney with the firm of Nilon, Paul and Mardinly (also non-party), prepared the original summons and complaint in the Underlying Action. When Bucco began planning to embark in private practice and realized that the Underlying Action would require greater resources than he would be able to provide, he sought help from defendant Rodger and the firm with which he was working at the time, Kassab, Archbold, Jackson, and O'Brien. Rodger filed a Motion for Leave to File Amended Complaint and a proposed amended complaint on behalf of the plaintiffs in the Underlying Action in March 1992. Plaintiffs in the instant action allege that defendant Rodger then went to plaintiff Norman Saferstein's home in New Rochelle, New York on May 2, 1992 *fn2" "to present his qualifications, his favorable opinion of the merits and validity of [plaintiffs'] lawsuit against [defendants in the Underlying Action], negotiated in detail the terms of his Fee Agreement and discussed in detail the obligations and responsibilities he and his firm would assume when retained." Am. Compl. P 4, at 2. Plaintiffs further allege that "[a] final agreement was reached at this New Rochelle meeting, It was at this meeting in [plaintiff Norman Saferstein's] house in New Rochelle where, unanimously, Bruce Rodger and his firm were engaged." Id. Soon afterwards, on May 18, 1992, Rodger left the Kassab law firm and joined the firm of defendant Paul, Mardinly Durham, James, Flandreau & Rodger, P.C.

 Plaintiffs claim that the agreement reached at the New Rochelle meeting was reduced to writing in a letter dated July 20, 1992 from Rodger to Ira Saferstein, one of the plaintiffs in the Underlying Action as well as in the instant action. See Am. Compl. Ex. A. That letter reads in pertinent part as follows:

 
As you know, I have assumed responsibility for representing the interests of you and the other plaintiffs in the above-referenced matter. Your former counsel, Paul Bucco, Esquire, will remain involved in this matter in an advisory capacity but he will no longer appear as counsel of record.
 
I am writing to confirm the understanding that has been reached regarding my firm's compensation for our services in this matter and to bring you up to date regarding the status of the case.
 
We have agreed that my firm will be entitled to receive as attorney's fees an amount equal to one-third (1/3) of the net amount that we are able to recover on your behalf through settlement, verdict or otherwise. As used herein, the term "net amount that we are able to recover" means the total amount recovered less costs and expenses incurred in connection with the litigation.
 
You and the other plaintiffs will be responsible for defraying the out-of-pocket costs and expenses that my firm will incur in connection with the litigation, to the extent and in the manner set forth hereinabove. At this early state of the litigation, it is impossible to predict with any degree of certainty the amount of costs and expenses that will be incurred. . . . I do not anticipate that this case will require any extensive travel, nor do I anticipate that significant amounts will have to be spent to create trial exhibits.
 
Per your request, and subject to the qualifications stated hereinabove, we have estimated that litigation-related costs and expenses will total approximately $ 8,000.00. You and the other plaintiffs have agreed to pay that sum to my firm to be held in escrow and to be applied toward litigation-related costs and expenses as they are incurred. If and when the amount of litigation-related costs and expenses exceeds $ 8,000.00 my firm will advance those additional costs subject to our right to be reimbursed for same out of the proceeds of any gross recovery that we obtain on your behalf through settlement, verdict or otherwise.
 
We have agreed to notify you prior to incurring any significant costs or expenses in excess of $ 8,000.00 and to obtain your prior approval therefor. . . .
 
Regarding the status of the case, we are still awaiting a ruling on the Petition for Leave to File Amended Complaint that I filed on your behalf in March of this year. In the meantime, however, Judge Gawthrop of the United States District Court for the Eastern District of Pennsylvania determined that venue was improper in that Court and he entered an Order transferring the case to the United States District Court for the District ...

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